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Press Release of May 13, 1999

  

 

On May 13, 1999, at its ordinary meeting, the Council of the Bank of Latvia approved the "Regulation for Addressing the Year 2000 Issue" and the "Regulation for Compiling Statistics on Payments by Credit Institutions".

The "Regulation for Year 2000 Compliance" has become effective upon its approval. It stipulates a set of measures to be taken by banks in order to ensure proper management of the Year 2000 problem, i.e., evaluating its potential impact on the banks' activities and minimising the inherent risks. The regulation will be binding for all banks and branches of foreign banks licensed by the Bank of Latvia. In addition, it will clearly point out to the banks the importance of the year 2000 issue and urge them to address it in a timely and efficient manner by allocating sufficient funds to this end.

Pursuant to the above regulation, banks must publicly inform their customers and other interested parties about steps they have taken in addressing the year 2000 issue. Such information could be posted, for example, on each bank's website.

The "Regulation for Compiling Statistics on Payments by Credit Institutions" shall become effective as of July 1, 1999. Its purpose is to start supervision and analysis of payment flows by credit institutions in order to determine types and volumes of payments processed in the Latvian banking sector. Such information will enable the Bank of Latvia to assess both the safety and efficiency of the existing Latvian payment systems and the introduction of new types of settlements and services. The collected data will help to determine the proportion of non-cash payments in Latvia and the ratio between payments made in lats and in foreign currencies. This information is also indispensable for implementation of the Bank of Latvia's monetary policy. The information on payment statistics will enable the Bank of Latvia to assess the financial risks inherent in the use of a particular means of payment and, if necessary, to draft recommendations or guidelines for credit institutions on issuing and servicing such means of payments with the aim of promoting efficient functioning of the payment system, reducing its risks and protecting the users of the means of payment, i.e., the bank customers.

To inform the EU member states about payment systems and their development in Latvia and other potential member states, the information on payment statistics will be regularly included in reports issued by the European Central Bank.

Reports on payment statistics must be submitted to the Bank of Latvia every six months, thus the Bank of Latvia will commence regular collection and analysis of statistics on credit institutions' payments starting with the year 2000.